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U.S. cuts rates for some high-risk health insurance pools

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Logo for the Washington State Pre-existing Insurance ProgramTrying to spur enrollment in a new health insurance program for uninsured people with pre-existing medical conditions, the federal government is doing something private insurers almost never do: slashing rates.

That announcement Friday came as the government released the latest enrollment figures for these high risk insurance pools, which have attracted far fewer customers than expected.

The program, established under the health law, began signing up enrollees in August and September. Not surprisingly, the states with lower rates have had higher enrollment.

As of Nov. 1, Pennsylvania has enrolled 1,657 people — 1,000 more than any other state, according to the Department of Health and Human Services. The Keystone state charges a $283 monthly premium — one of the lowest rates in the country. Pennsylvania is also the only state to charge the same rate regardless of age. Other states have higher rates for older people.

“Making it a little more affordable was in the thought process for us,” said Melissa Fox, spokeswoman for the Pennsylvania Insurance Department.

Logo for the Washington State Pre-existing Insurance Program

Premiums vary in the program nationally to reflect partial differences in health costs nationwide. Missouri, for example, has one of the highest monthly premiums – ranging from $423 to $972 a month. Only 101 Missouri residents have enrolled.

Overall, the new federal Pre-Existing Condition Insurance Plan has enrolled about 8,000 people nationally, even though the Congressional Budget Office estimated that as many as 4 million uninsured Americans would be eligible and that 200,000 would be enrolled by 2013.

The federal government is subsidizing the program with $5 billion until 2014 when the program ends. At that time insurers will no longer be able to discriminate based on a person’s health status.

To be eligible for the new program, you must have been uninsured for at least six months and have a pre-existing condition.

Many states were worried about not being able to meet the demand for coverage with limited federal funding. So 23 states and the District of Columbia opted to have HHS run the plan for them.

HHS said Friday that it would lower premiums by about 20 percent in 2011 and offer different cost/benefit options in those plans and asked the states running their own programs to consider lowering their rates as well.

“Enrollment is beginning to accelerate and with these changes we expect it to continue to accelerate,” said Richard Popper, director for the Office of Insurance Programs in HHS’ Office of Consumer Information and Insurance Oversight.

“There’s no question that lower prices make some difference,” said Michael Keough, executive director of the North Carolina Health Insurance Risk Pool.  North Carolina, where rates range from $183 to $729 a month, has enrolled 513 people, tied with California for fourth highest in the nation.

Michael McRaith, director of the Illinois Insurance Department, said he believes that price is an important motivator. The plan in his state, where premiums begin at $111 a month, has attracted 664 enrollees. “The lower the costs the more likely people are to enroll,” he said.

To be eligible for the new program, you must have been uninsured for at least six months and have a pre-existing condition. Most states require applicants to show proof that they’ve been rejected for coverage by a private insurer within the past six months or been denied coverage for certain benefits.

At least a dozen states, including Pennsylvania, give applicants the option to provide a doctor’s note as proof they have a pre-existing condition such as cancer or rheumatoid arthritis.

HHS has hired a private contractor to administer the programs it runs in states but generally they have enrolled fewer people than states running their own program.

“It makes sense if you own the program you hopefully know a bit more about your territory than those at a national level and maybe we care about it a bit more,” Keough said.

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LOCALHEALTHGUIDE EDITOR’S NOTE:

Washington state has a state-run Pre-existing Conditions Insurance Plan.

To qualify for coverage:

  • You must be a citizen or national of the United States or lawfully present in the United States.
  • You must have been uninsured for at least the last six months before you apply.
  • You must have had a problem getting insurance due to a pre-existing condition.

The Pre-Existing Condition Insurance Plan will cover a broad range of health benefits, including primary and specialty care, hospital care, and prescription drugs. All covered benefits are available for you, even if it’s to treat a pre-existing condition.

Premium:

  • $177 to $1,577 per month

Deductible:

  • Plan 1: $2,500
  • Plan 2: $500

Out of Pocket Limit:

Plan 1:

  • Medical: $4,950 in-network, $7,400 out-of-networ
  • Pharmacy: $1,000

Plan 2:

  • Medical: $1,000 in-network, $2,000 out-of-network
  • Pharmacy: $500

For more information, p call 800-562-6900 or go to Washington’s PCIP program’s home page: www.wship.org/PCIP-WA

To learn more:

  • Visit the Pre-existing Condition Insurance Plan information page on Healthcare.gov.
  • Washington state’s Pre-existing Condition Insurance Plan-Washington State (PCIP-WA)

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This article was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.

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